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Tomorrow is unknown Plc. expects sales of GHC 2.4 million next year and the same...

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Accounting

Tomorrow is unknown Plc. expects sales of GHC 2.4 million next year and the same amount the following year. Sales are spread evenly throughout the year. On the basis of the following information, prepare a forecast income statement and balance sheet for the year end:Cash: Minimum of 4 percent of annual salesAccounts reccivable: 60day average collection period based on annual salesInventories: Turnover of eight times a yearNet fixed assets: GHC 500,000 now. Capital expenditures equal to depreciation.Accounts payable: One month's purchasesAccrued expenses: 3 percent of salesBank borrowings: GHC 50,000 now. Can borrow up to GHC 250,000Long-term debt: GHC300,000 now, payable GHC75,000 at year end.Common stock: GHC100,000. No additions planned.Retained earnings: GHC500,000 now.Net profit margin: 8 percent of sales.Dividends: None.Cost of goods sold: 60 percent of salcs.Purchases: 50 percent of cost of goods sold.Income taxes: 50 percent of before-tax profits.

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